$1.5 billion: The cost of cutting London-Tokyo latency by 60ms

Share This article

Starting this summer, a convoy of ice breakers and specially-adapted polar ice-rated cable laying ships will begin to lay the first ever trans-Arctic Ocean submarine fiber optic cables. Two of these cables, called Artic Fibre and Arctic Link, will cross the Northwest Passage which runs through the Canadian Arctic Archipelago. A third cable, the Russian Optical Trans-Arctic Submarine Cable System (ROTACS), will skirt the north coast of Scandinavia and Russia. All three cables will connect the United Kingdom to Japan, with a smattering of branches that will provide high-speed internet access to a handful of Arctic Circle communities. The completed cables are estimated to cost between $600 million and $1.5 billion each.

All three cables are being laid for the same reasons: Redundancy and speed. As it stands, it takes roughly 230 milliseconds for a packet to go from London to Tokyo; the new cables will reduce this by 30% to 170ms. This speed-up will be gained by virtue of a much shorter run: Currently, packets from the UK to Japan either have to traverse Europe, the Middle East, and the Indian Ocean, or the Atlantic, US, and Pacific, both routes racking up around 15,000 miles in the process. It’s only 10,000 miles (16,000km) across the Arctic Ocean, and you don’t have to mess around with any land crossings, either.

The massive drop in latency is expected to supercharge algorithmic stock market trading, where a difference of a few milliseconds can gain (or lose) millions of dollars. It is for this reason that a new cable is currently being laid between the UK and US — it will cost $300 million and shave “just” six milliseconds off the fastest link currently available. The lower latency will also be a boon to other technologies that hinge heavily on the internet, such as telemedicine (and teleconferencing) and education. Telephone calls and live news coverage would also enjoy the significantly lower latency. Each of the fiber optic cables will have a capacity in the terabits-per-second range, which will probably come in handy too.

Beyond the stock markets, though, the main advantage of the three new cables is added redundancy. Currently, almost every cable that lands in Asia goes through a choke point in the Middle East or the Luzon Strait between the Philippine and South China seas. If a ship were to drag an anchor across the wrong patch of seabed, billions of people could wake up to find themselves either completely disconnected from the internet or surfing with dial-up-like speeds. The three new cables will all come down from the north of Japan, through the relatively-empty Bering Sea — and the Arctic Ocean, where each of the cables will run for more than 5,000 miles, is one of the least-trafficked parts of the world. That said, the cables will still have to be laid hundreds of meters below the surface to avoid the tails of roving icebergs.

Each cable will be laid by a pair of ships: an ice breaker that leads the way, and a cable ship. Until now it has been impossible to lay cables in the Arctic Ocean, but the retreat of the Arctic sea ice means that the Northwest Passage is now generally ice-free from August to October; a big enough window that cable can be laid fairly safely. Existing cable ships (and there aren’t many of them) are all outfitted for balmier climes, so all three cables will require the use of a polar ice-rated ship that has been retrofitted to carry cable-laying gear.

Tagged In

Post a Comment

We’ve came a long way since 1850 but the engineering solution provided by Cable&Wireless back then still holds true. Sad to see no South American love though :(

Anonymous

We’ve came a long way since 1850 but the engineering solution provided by Cable&Wireless back then still holds true. Sad to see no South American love though :(

Anonymous

According to the Submarine Cable Map site http://www.submarinecablemap.com/ South America has several submarine cables on both eastern and western coasts. Of course they focus on capital cities or highly important ones, leaving the rest of the sub-continent (specially its southern cone) without much high speed connections!!!

Anonymous

We’ve came a long way since 1850 but the engineering solution provided by Cable&Wireless back then still holds true. Sad to see no South American love though :(

Anonymous

We’ve came a long way since 1850 but the engineering solution provided by Cable&Wireless back then still holds true. Sad to see no South American love though :(

Anonymous

We’ve came a long way since 1850 but the engineering solution provided by Cable&Wireless back then still holds true. Sad to see no South American love though :(

http://pulse.yahoo.com/_YQMKVTJXWASR4PIWQSKIPKALKI adaviel

I wonder if a cable could have been laid by submarine. The US spooks were intercepting Russian undersea cables years ago.

Anonymous

Then spawns the hyper-intelligent whales and dolphins! Haha, a cheesy sci-fi flick could easily have this plot!

Anonymous

First obvious question: Who is paying?

This makes no sense as a latency reduction. Algorithmic trading? Bullsh*t, they use co-location to avoid latency, not long cables, and are in the business of making money, not flushing it.The only use would be to increase overall bandwidth and redundancy of the Internet.

So again, who is paying?

http://twitter.com/paulglsw Paul Grimwood

Agreed.

http://www.mrseb.co.uk Sebastian Anthony

Almost every cable in the world is privately owned. I think in this case the Canadian and Russian governments are subsidizing the links slightly, as they link up some northern communities in both countries.

http://www.hokstad.com/blog vidarh

There’s plenty of trading that rely on information on price moves in one market to affect trading on another market. As an example:

A huge price drop for a DRAM manufacturer in Asia, might indicate problems that would impact the supply of RAM and hence have follow on effects on the share price of computer manufacturers worldwide, for example.

Getting in 60ms earlier could easily mean the difference between being able to unload a bunch of shares at the peak vs. taking a massive loss.

http://twitter.com/#!/alexdgn alexdg

That is one option. But the main opportunities is just arbing the likes indices, ETF’s and commodities and news.

http://twitter.com/#!/alexdgn alexdg

We’re talking about algos that are arbitraging between 2 geografic markets. The faster the link between the two, the faster they cash in the arb before others do.

Liutauras Diu

London-Toyko?

Anonymous

There’s actually a TED talk about how algorithms are determining even infrastructure — rapid trading being the prime example. Sad to see how even “science” (actually engineering) has been hi-jacked by the financial sector. A transaction tax would cease this awful waste and subsidy for the rentiers, and turn our attention to more productive endeavors.

Major Plonquer

A transaction tax would (in fact IS) push thousands of traders in Frankfurt and Paris to search for extreme low-latency solutions so they can move their transactions to a more investor-friendly location (such as Singapore or Tokyo). Like any tax, it will only drive business away and reduce – not increase – the amount government raises. The EU’s Tobin tax is one of the dumbest ideas in the history of dumb ideas.

James Ingles

“As it stands, it takes roughly 230 milliseconds for a packet to go from London to Tokyo; the new cables will reduce this by 30% to 170ms.”

I’m no mathematics genius but by my calculations 170 is 26% of 230 not 30%…

http://www.mrseb.co.uk Sebastian Anthony

You know there’s a circle of hell dedicated to people like you, right? A circle of hell where decimal points are always out by one, and numbers are inconsistently rounded…

Anonymous

I dont’ think latency is the big issue.. we see fiber optics growth in use as a primary driver of laying new cables. Of course there are companies that could pay a premium for such specific routes on packets such as stock traders.. but that’s not the primary profit motive of the companies laying the fiber. These companies *MAKE MONEY* on volume business and the more bandwidth they can provide, the higher prices they can charge and pass along to the consumer for higher speed tiers. One day, these international fiber routes will end up padding your ISP bill by about 1 – 10% but you will see FASTER international speeds and lower latencies (on average) as a result.

Major Plonquer

No, it won’t play out that way. There are some seriously big and fast transmission solutions being tested today. What these will do is move OFF the Internet onto currently dark fibre so that enterprises will effectively have their own networks. These same enterprises currently use about 5% of global Internet bandwidth but pay for the equivalent of 80%. Big enterprises are subsidising consumer applications such as Youtube and Netflix. When this subsidy is removed the entire consumer Internet will need to be rethought. It’s Youtube and Netflix that will pad your ISP bill. Enterprises will have buggered off to cheaper solutions.

Anonymous

Trans-Arctic cable. What a cool project. X-D

Anonymous

If 60 ms can boost algorithm earnings trading by 1.5 billion USD, something is very wrong with the current markets. This is not the way it is supposed to work.

http://twitter.com/SoftwareWorlds SoftwareWorld

so the green house effect has some positives it seems.

http://profiles.google.com/daedalus4u David Whitlock

There is no plausible social good from trading algorithms that gain an advantage from a few milliseconds of latency.

Trading based on lowest latency information should be considered insider trading, trading on information not available to the public. Why information is not available to the public doesn’t matter.

David Shin

There is also a farmer in Ethiopia for whom the information is not available readily. Trading based on information not available to that farmer should be considered insider trading. Why the information is not available to that farmer does not matter.

Anonymous

Did nobody think to just install the servers in a Tokyo datacenter!?!?!?? The decision making algorithms can be “provisioned” from London as there is no reliance on low latency or speed and “executed” on servers in Tokyo which are close by, providing lowest possible latency.

Use of this site is governed by our Terms of Use and Privacy Policy. Copyright 1996-2015 Ziff Davis, LLC.PCMag Digital Group All Rights Reserved. ExtremeTech is a registered trademark of Ziff Davis, LLC. Reproduction in whole or in part in any form or medium without express written permission of Ziff Davis, LLC. is prohibited.